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Microsoft has introduced a range of new features to its Office 365 web apps, strengthening the free productivity tools amid a growing rivalry with Apple's iWork suite. Real-time co-authoring is the focal point for the web-based utilities, enabling multiple users to simultaneously collaborate on the same project. The feature essentially catches up with the capabilities of iWork and Google Docs.

Real-time collaboration is now available in the Word, PowerPoint and Excel web apps, showing each user where the other co-authors are working in a document to help avoid conflicts. Changes in text and formatting are also immediately visible to every author.

Each of the web apps also brings its own set of additional new features, such as improved formatting controls in Word and new picture-cropping tools in Powerpoint. The Excel utility brings drag-and-drop cell movement, data analysis in the status bar, and support for more workbook types and spreadsheets that have Sheet Protection.

Microsoft has come under increasing pressure from free productivity utilities offered by competitors. Google has competed in the space for a number of years, while Apple only recently announced that its iWork software - already cheaper than Office - would be offered for free.

Microsoft communications head Frank Shaw recently dismissed Apple's software, claiming the "watered down" iWork apps have yet to gain any traction. He further suggested the move toward free distribution was evidence that the company is still attempting to "play catch up."